In this exclusive interview with Edward Jones CMO Tim Rea, Rea explains how financial advisors can best connect with ever-changing generations of long-term investors.
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00:00 I'm here with Tim Ray, the CMO of Edward Jones.
00:03 Thank you so much for joining me.
00:04 - Oh, pleasure.
00:05 Thank you, Sarah.
00:06 - So I just saw you speak at a breakfast,
00:07 and the thing that really stood out
00:08 is how you talk about your company being so boring.
00:11 How do you market?
00:13 How do you be the head of marketing for a boring company?
00:16 - Well, I'm not sure the folks in St. Louis
00:18 would appreciate that moniker of boring,
00:20 but it's within the context of luck.
00:22 We just do the fundamentals,
00:24 which is a long-term perspective,
00:25 conservative investments,
00:27 and really get to know the people we're serving.
00:29 It's actually a pleasure, and it's a solid company,
00:33 so it's a pleasure to really share that
00:35 with potential investors,
00:37 that there is a better alternative
00:38 as you bring Wall Street to Main Street.
00:40 - And of course I'm joking.
00:41 - Of course. - I think you talk about it
00:42 as a conservative investing.
00:44 Can you talk a little bit about
00:46 why that's such an important cornerstone of the business?
00:49 - Yeah, it is really founded on,
00:51 as we grew up as a company,
00:53 we were penetrating underrepresented markets,
00:56 underserved markets, if you will.
00:58 And so this idea of both financial education
01:01 along with simple products really was a great fit.
01:05 If you read all the literature, time is your best friend,
01:08 and so this idea of long-term investing,
01:11 we're dealing with folks who really wanna understand
01:14 how we're delivering for them,
01:16 so conservative investments really make sense for us.
01:18 - And one of the things that sets Edward Jones apart
01:21 is your physical locations.
01:22 - Absolutely. - More than Starbucks,
01:24 is that true? - Yes, in the US.
01:25 In the US, not internationally, yeah.
01:27 - And why is that important to your business?
01:30 - Well, we really see this as you have to be
01:32 in the communities that you serve
01:34 to really develop the level of trust,
01:36 where folks will give you their financial future
01:38 and say, "Help me out."
01:40 So we are in 68% of the counties, of all US counties.
01:45 We hear stories all the time of folks who go in, out,
01:49 shopping in their community,
01:50 and they're running into their clients
01:52 and having conversations.
01:53 And that's what's so special about being there.
01:56 You see it from your client's eyes,
01:58 and you're able to interact with them as a neighbor.
02:00 - And what's the relationship with the advisors
02:04 in these locations?
02:05 And what is the feedback?
02:07 What support do you give them,
02:09 and then what information do you get back?
02:11 - Yeah, so we provide all the back office services,
02:14 if you will, and of course the overall branding,
02:16 which is important to me,
02:17 for folks as they look to build their books
02:19 in their communities.
02:21 What's also great about it is, and you just touched on it,
02:24 we are a clearinghouse for all the information
02:26 about middle America across the country.
02:29 And so a really important part of our culture
02:32 is sharing success stories.
02:34 So we will have folks in different parts of the country
02:36 share what's working for them,
02:38 and someone else in other parts of the company
02:40 can just grab that and really help increase
02:43 their level of service to clients in their community.
02:46 So it's just a big win for us.
02:48 - And what's one of the big questions that you see
02:49 that are coming through
02:51 that clients are asking for right now?
02:53 - Yeah, it's when is the market gonna go down?
02:56 We don't have any crystal balls, we'd love that,
03:00 but our philosophy of long-term investing
03:02 and having on the up front talk them through
03:05 that the market's gonna go up, market's gonna go down,
03:08 we're here to partner through all of it,
03:10 and so when they get the panicked calls,
03:12 or when they make the panicked calls
03:13 to our financial advisors, it's hey, remember,
03:16 we talked about that.
03:17 But that's always the number one question,
03:18 probably closely followed by, am I ready to retire yet?
03:23 And wonderfully, we can say yes in some cases.
03:26 - How do you reach new generations of investors?
03:29 - Yeah, so we have a unique business model
03:31 where we have financial advisors
03:32 embedded in the communities,
03:34 and they're often interacting with their clients' children.
03:37 So they're seeing them right away.
03:40 From our home office in St. Louis,
03:42 we've really branched more into digital marketing,
03:45 trying to meet younger consumers where they are.
03:48 And then a program that we're really excited about
03:51 is really financial fitness education.
03:53 So we're reaching out into schools,
03:55 or giving our financial advisors the tools
03:57 to go into schools to educate about basic financial facts,
04:00 as well as partnering with EverFi to go out
04:05 and give folks the opportunity to learn on their own
04:08 through digital platforms.
04:09 So we've said, hey, we want a million financial learners
04:12 by 2025, and we're already at 725 at the end of the year.
04:16 So we're excited about that.
04:17 But those are all ways in to reach younger folks
04:21 where they are, and so we can bring them
04:23 into relationship with us.
04:24 - And is TikTok an important part of your strategy?
04:27 I'm just asking personally, I really wanna know.
04:29 - Well, we actually have had our first advertisement
04:31 in TikTok within the last two months.
04:33 - Oh, wow.
04:34 - Yeah, and it's called EdWords of Wisdom.
04:35 It is targeted to younger users.
04:37 - I love that.
04:38 - And it pulls them right into that financial learning site.
04:40 So thank goodness, I'm not dancing on that.
04:43 So that's the most important.
04:44 - Yeah, that is very important.
04:46 And what is the biggest change that you think needs
04:48 to happen in financial services to open up access?
04:51 - Yeah, inclusivity is such an opportunity for our business.
04:55 Most people are fearful because they don't know.
04:58 So I do think education is an incredible part of that.
05:00 I do think it's also an opportunity for the industry
05:03 to look at how do we serve clients
05:04 whom English may not be their first language.
05:07 Right now, we are set up to serve in English as an industry,
05:11 and we know that just within, I think it's within,
05:15 we just did a study of 18 to 34-year-olds,
05:17 over half of them identify as non-white or multicultural.
05:20 We know with that comes several backgrounds and languages,
05:25 and why we're not serving at all of them as an industry
05:28 is a challenge I would offer up.
05:30 - Can you talk a little bit more
05:31 about why we're not serving them as an industry?
05:34 - So the industry, I think, has that opportunity
05:36 from a regulatory standpoint and from the companies,
05:42 my fellow partners and firms, to make a conscious choice
05:46 to want to serve in those different languages.
05:49 Right now, I think we set up guardrails
05:51 that English is our only means of communication.
05:54 From a service standpoint, when someone becomes a client,
05:58 we can talk to them before they become a client
06:00 in any language that we choose.
06:02 But after they become a client,
06:04 the rules of the road are set.
06:05 - Really, and that's a regulatory--
06:08 - At least that's what my compliance folks have told me.
06:10 - Yeah, no, absolutely, that is really interesting.
06:13 - So if you think through the food chain,
06:14 SEC would need to set up its regulation
06:18 to allow for multilingual.
06:19 All the prospectuses that we would have
06:21 would also need to be printed in additional languages.
06:23 So it is an industry-wide opportunity.
06:26 - Absolutely. - Yeah.
06:27 - That's fascinating. - Yeah.
06:28 - And you said you mentioned the survey.
06:30 What else did you learn in this survey?
06:32 - So we went out and surveyed over 2,000 18 to 34-year-olds,
06:36 what we call GenNext.
06:39 And we just had some really incredible findings
06:43 about how positive they are on their future.
06:46 I know sometimes we think, oh no,
06:48 the things are all going negative.
06:49 Not so.
06:51 We know that 12% of that group
06:54 is already with a financial advisor,
06:57 and 40% of them say, you know,
06:59 at some point in the future, I'd like to.
07:02 But one of the key findings is,
07:03 yes, right now they're in survival mode.
07:05 I think back to that age when I was,
07:08 a long time ago, and I was trying to pay bills,
07:10 I was trying to get things set up.
07:12 But they have such a positive attitude
07:14 that in five years they think they're gonna be thriving,
07:16 which is wonderful.
07:17 And they're so positive on the future.
07:19 I know a lot of my friends have said,
07:22 wow, their kids aren't thinking about having children.
07:25 We found in the survey just the opposite,
07:27 that eight out of 10 of the 18 to 34-year-olds
07:30 either have kids already or want to have children.
07:33 And they're really focused in on
07:35 having a comfortable life with family and friends.
07:38 So very positive and bullish on the future.
07:40 - Huh.
07:41 And I wanna talk about your career a little bit.
07:44 How similar is marketing financial services
07:47 to candy bars and restaurants
07:49 where you have a strong background in?
07:52 - Well, there's similarities and differences.
07:54 The similarity is you're still interacting with people.
07:58 And so the psychology and the behaviors
08:00 of individual choice are still there.
08:04 The differences, really, I'm regulated now,
08:07 which, I mean, FDA does a little regulation
08:09 in the candy bar space,
08:10 but we're regulated in this industry.
08:13 And you're really talking about developing trust
08:16 to a deeper level over the course of a relationship.
08:19 Product-based, even meals, are relatively fleeting.
08:24 But this is about a long-term relationship
08:28 and really in 30 seconds trying to sell someone
08:31 that they can trust you.
08:32 And so that's why we believe our model's so great
08:34 about folks living in the community.
08:37 And that's been a little difference as well,
08:40 is we get the opportunity to work through folks
08:42 embedded in the community who are their own brand.
08:45 So we get to work with them in building their business.
08:48 - And any lessons from launching the Take 5 candy bar?
08:52 - The fun thing about Take 5 was really listening
08:54 to the folks on the line.
08:56 So that's a product that's manufactured
08:58 in a factory in Virginia.
09:00 And early on, we had a breakage problem
09:03 with the pretzels that are in there.
09:04 For those of you who don't, have you had a Take 5?
09:07 - No, I have not, but I'm going to.
09:08 - Okay, okay. - Immediately following this.
09:10 - Wonderful, it's a wonderful salty-sweet experience
09:12 because it's a lattice pretzel with caramel-chopped peanuts.
09:17 - It sounds good.
09:18 - Oh, it's so good.
09:19 It's salty and sweet.
09:20 But we were having problems on the line
09:22 with pretzels breaking, and so we listened
09:24 to some engineers and some folks who were on the line,
09:27 and they said, "Well, why don't you just switch
09:29 "the direction the pretzel goes down the line?"
09:31 And it solved the breaking problem.
09:33 So I took from that this learning
09:35 of always listen to those closest to the action,
09:38 and that'll really serve you well.
09:40 - That's great, and I want to ask you
09:42 my favorite question to ask marketers.
09:43 - Yeah.
09:44 - What work did one of your peers do in the past year
09:47 that you're like, "Man, I wish I would've thought of that"?
09:49 - Yeah, I'm really into authentic marketing,
09:52 and so, dove, I don't consider a competitor.
09:56 But I look at the folks at Chase,
09:57 and I like the work that they're doing
09:58 in terms of Chase What Matters to You.
10:01 I think most recently, you said within the last year,
10:03 their business unit has been telling authentic stories
10:06 of small business and how the Chase relationship
10:09 has helped them, and I think it's something,
10:10 do more with what you've earned,
10:11 or do more with what you have.
10:12 So I think that's a great, authentic way
10:15 to communicate their benefit to their clients.
10:17 (silence)
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